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From The Socialist newspaper, 22 July 2020

Saving the music industry from pandemic and austerity

  (Click to enlarge)

Nick Brook, record label worker and Black Country Socialist Party member

"90% of UK venues and festivals face closure" warned a report from the Music Venue Trust in June. Like many other service industries, the live music business has been left on a cliff edge by the onset of Covid-19 and cancellation of events throughout the prime spring and summer period.

Most of the musicians and other workers in live music who put their labour into generating the industry's 1.1 billion annual turnover have been left in a precarious situation. With many of us in the original 'gig economy' carrying out a variety of one-off and irregular jobs to earn a living, accessing financial support has been difficult. There are anxious waits to receive grants for the self-employed from central government and national arts councils.

Belatedly, the government has announced a 1.6 billion rescue package for the entire culture sector. This is welcome, although it is not clear how much of this funding will make its way to the small arts organisations and arts workers who most need it.

And really, the sector needed this kind of additional funding even before venues closed and box office takings collapsed. In reality, far more will be necessary as social distancing and reduced incomes continue to hit audience numbers and other sources of money.

Fewer jobs

As any professional musician will tell you, the job might have its enjoyable sides, but it is work all the same. For the jobbing musician it's still possible to scratch out a living, though this has been getting harder for several years due to the number of potential gigs drying up.

During the 2010s, 35% of dedicated live music venues shut their doors. Many were victim to rising rents, and property developers reasoning their locations could be more profitable if converted into overpriced flats.

Further difficulties have been created by an increasing share of major venues becoming concentrated in the hands of a small number of large entertainment conglomerates, in particular Live Nation.

As well as controlling several large music festivals, Live Nation has a majority share of medium-to-large venues in the UK through ownership of Academy Music Group. It has a virtual monopoly in cities such as Birmingham, where it operates both the Academy on Bristol Street and the Institute in Digbeth.

At the more genteel end of the spectrum, local authority and not-for-profit arts centres and theatres previously provided a network for more niche genres such as folk and jazz. They were also the only places in many small towns with a stage, proper PA system, and lights.

Since 2010 in particular, councils passing on government cuts, and reductions to other public funding, have meant that many have either had to close, or take a more 'commercial' approach in programming. Touring musicians are forced to absorb much more of the overhead costs and financial risk of performances.

Poverty pay

Having secured a gig, there's the question of pay. The average musician earns 9,000 less than the median annual wage.

As of 2020, the Musicians' Union-recommended rate for a pub or club gig of up to three hours, including breaks, is 128. Even this is more aspiration than the going rate, with around half of that being the norm for many.

If 60 sounds like good pay for standing on a stage and playing for a bit, consider a typical working day for a musician. Travelling to a gig for two hours, setting up for an hour, playing for three hours, then another two hours of packing down and travelling home, sometime after midnight.

Never mind putting on a show and giving a good performance no matter whether you're under the weather, just broke up with your partner, or are just having an off day.

And even that fee is only per gig. It doesn't account for the hours of solo practice needed to reach and stay at a professional level, let alone rehearsals with bandmates, time writing material, and purchasing and maintaining professional-quality instruments and gear.

Alongside musicians, at any gig from The Dog and Duck through to Wembley Stadium there are others working to make the performance possible - from bouncers to sound engineers to bar staff.

In the case of arena shows, thousands of people pay 50-plus per ticket. The small army of workers required to set up and staff the venue can be paid reasonably. The band and crew can be properly fed and accommodated, and pay the rent back home. The promoter and management can take a cut. Everyone walks away in profit.

But when planning a tour playing to crowds of a few hundred a night, the numbers stack up much less comfortably. That's even with a slimmed-down road crew of one person fulfilling the roles of van driver, roadie, and agony aunt!

And the further down the food chain you go, the more likely the band themselves are going to have to personally take on the financial risks from gigs. They'll receive a percentage of ticket sales after promotional and overhead costs.

With income from live performance drying up - possibly for the remainder of 2020, or even beyond - record sales and streaming have been placed in the spotlight. Only modest amounts are earned, even by relatively successful musicians. A debate has kicked off on social media under the #BrokenRecord and #FixStreaming hashtags.

Alternative income

For the first 15 years of this millennium, the recorded music industry seemed to be in terminal decline. This was put down to the internet allowing people to download music for free through 'pirate' sites. Just over ten years ago, Spotify and other streaming services emerged as the 'saviour' of the record business - growing to around 60% of industry revenues worldwide today.

Streaming services generate steady revenue through advertising and subscription payments. They were therefore able to agree deals with the big labels and publishers who control the rights to your favourite tunes, to pay them a set amount based on the number of plays.

These deals were negotiated on a label-by-label basis. That meant the four majors - now three due to EMI's collapse - were able to negotiate better rates, plus big shareholdings in the case of Spotify. This was due to owning the best-known songs by the best-known artists. Smaller labels had to fight over the scraps.

The major streaming services pay between 3 and 6 to the label controlling a given song per 1,000 plays. This provides a steady income from hits that manage to get into the tens of millions of plays.

In true 'rentier' capitalist style, streaming also favours major labels for controlling classic songs from years or decades ago. Songs that are perennially popular, or enjoy a resurgence thanks to being featured on film or TV, or when a star dies, and so on.

However, for artists working in specialist genres that by and large aren't going to be million-streamers, the picture is less rosy. Pre-streaming they would have made a large portion of their CD sales direct to fans at gigs, paying back the debt to their label, and earning ready money on top. Now this source of income has tailed off, thanks to their fanbase streaming their music, but not at a big enough volume to make a significant dent in their overdraft.

And despite the ongoing shift away from selling physical CDs, cassettes and records, and the rolling out of streaming services to more and more countries across the globe, the balance sheet of many streaming companies looks sketchy at best.

Spotify is the market leader. Unlike Apple, Google and Amazon's music offers, it's the only major service that doesn't have a large, profitable parent company to piggyback on.

Spotify is yet to make an annual profit more than a decade after launching. In this respect, it is similar to many other 'platform' companies that have been stock market darlings, from Netflix to WeWork to Uber.

And like other platform companies, the shift from physical to digital consumption is a classic example of how capitalism uses new technology to reduce the overall amount it pays to workers in any sector.

In the days before the internet took off, to get a piece of music from the studio into consumers' homes would take pressing plants to manufacture the CDs or vinyl, then distribution networks of drivers and warehouses, on to the staff in record shops. Streaming has eliminated the need for these labour costs, while AI has replaced much of the admin required in administering royalties.

But many record deals are still factoring them in to give artists a meagre royalty rate. And even then, only once the cost of making the album, plus any advance paid to the artist when they first signed their deal, has been repaid in full.

In response to this, many artists are moving to 'label services' deals. The artist shoulders the upfront costs of making an album, then the label helps release and promote it, on the basis of shared risk and reward, and the artist retaining full ownership of the recordings.

But the ready money and name recognition to make this work favours established acts. It makes it harder for performers from a working-class background in particular to launch their careers.

There is still teaching, of course. It's true that the majority of full-time musicians do some form of teaching, either contracted to an educational body or independently, to provide a reliable source of income.

However, over the last decade, local authority music services responsible for providing teaching in schools have been semi-privatised and starved of funding. Meanwhile, many schools are taking music out of the curriculum in response to the Tories' stultifying focus on 'core' subjects.

There is a new income source: crowdfunding. In recent years, crowdfunding around a specific album release, or in the form of ongoing subscriptions, has provided a useful income stream for many bands and performers. It is less dependent on traditional gatekeepers.

However, it isn't without risks. Musicians and fans are forced to place their trust in platforms that, like a lot of tech start-ups, operate on a shaky financial model. In 2019, crowdfunding site Pledgemusic went bankrupt, leaving many artists and fans alike out of pocket.

More crucially, successful crowdfunding needs an artist to have existing fans willing to buy into the music. It is difficult or impossible for those just starting out.

So could a 'universal basic income' targeted at musicians allow us the time and freedom to create?

In a market economy, blanket payments to artists would be taken into account by engagers and publishers, and much or all of the gain would end up offset by cuts to rates or extra charges. Capitalist governments would also not be willing to take the money for it from their big business mates, so would set it at unliveable rates and use it to cut benefits even further.

Nonetheless, an element of income support existed in the 2000s with the 'New Deal for Musicians'. Unemployed musicians could get a top-up to their dole money for access to recording and rehearsal studios.

Socialist programme

But rather than paying musicians to sit at home waiting for the phone to ring, a much better approach would be to fund abundant opportunities to create and perform, paid at a living rate. Our aim should be full employment for all workers, including all musicians who are able to perform to a professional standard.

In education, for example, every child should have the opportunity - like private school students have for many years - to learn a musical instrument, whether that's classical oboe, rock guitar, or electronic music software.

And for those musicians who prefer not to teach, public funds could make other opportunities available, such as free performances in shopping centres, libraries, and workplace canteens to bring music to the masses.

These two schemes could provide a basic level of income for musicians, with the opportunity to take enough hours to add up to a full-time job - or mix and match with recording, touring, and non-musical work.

Music, and the arts more generally, will only survive the coronavirus pandemic in any kind of healthy state if there is massive public investment. The Tories have poured hundreds of billions into airlines and other sectors. Arts workers and venues need bailouts too.

Any shortfall in income - due to the lockdown, and social distancing when venues reopen - must be underwritten by public funds. Subsidise the maintenance of existing programming, and reverse austerity to expand funding to all parts of the arts.

A permanent subsidy to the shortfall between income from tickets and refreshment, and core production costs, would allow small venues to take more risks in programming. And restoring funding to local councils and other public bodies, under the democratic oversight of workers, audiences and artists, could support more diverse local projects, and cheap or free rehearsal and performance facilities.

Nationalising the banks and finance sector would provide more than enough resources to pay for these schemes and a general reversal of austerity. The giant record labels, as well as monopoly venue chains like Live Nation, should also be nationalised under democratic workers' control and management.

As part of a democratic, socialist plan for the economy, the state could then advance loans, cheap or interest-free, for the upfront costs of all levels of recording and performance project. This would be unlike conventional recording deals today, where the major labels act as inefficient money-lenders, and demand a large slice of future earnings once the original debt is paid back.

Streaming is a thorny question for a lot of musicians. However, technology isn't inherently good or bad - the question is which class controls it.

To make streaming work for musicians and songwriters, a first step would be to nationalise the 40-plus streaming platforms, to prevent duplication delivering an essentially identical product, with the savings in overheads passed on to creators. Democratic control by artists, audiences and the trade union movement could level the playing field for smaller acts.

And in the ongoing debates about the state of the music business, there's an elephant in the room. The biggest challenge to the music industry over the last 30 years isn't the rise of the internet, or other forms of entertainment. Rather it's the fact that the average worker now has less disposable income and free time.

One of the biggest positive changes for those working in music under socialism would be decent pay and a reduced working week for all. This would allow working-class people to go to more gigs, explore new bands and producers, purchase merchandise, and enjoy the flowering of culture that follows any revolutionary movement.

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In The Socialist 22 July 2020:


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